2011 Asia Business SA

I am a global supply chain emphasis student and find it interesting to read about the inner-workings of our massive global supply chain. I have read a lot of news how the earthquake/tsunami in Japan has hurt manufacturers in Japan. However, we need to realize that these affects are not confined to Japan manufacturers. We are seeing how disruptions in the supply chain are causing problems for Korean based firms as well as American-based firms. This article talks about how some Korean manufacturing plants, especially in the automobile industry, are having shortage problems of critical parts imported from Japan. I think it is important to realize as students and future managers that we don’t live in a Vacuum. Our decisions will affect more than just our company because we live in global economy now.

-Steven Hall

By Miguel Helft and Nick Bunkley

New York Times, March 15, 2011

Japan is an important producer of chips that are used in many different electronics sold around the world. Many devices that aren’t made in Japan still have parts that made in Japan and included in the manufacturing process. With the devastating earthquake and tsunami many factories have closed down and that has driven the world price of memory chips up almost three dollars. At the same time production of many Japanese cars has halted in Japan and it is being slowed down in other countries as well because the cars often require parts that are made in Japan. We could see a shortage of new cars and electronics on the market in the next few weeks which can drive up the price temporarily.